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Free Advice on Money for Those With Little

Juan Maldonado talked to Henry Soto, 34, left, as Mr. Soto's wife, Jasmine, held their daughter Kylie Ann. Mr. Maldonado encourages clients to save.Credit
Kirsten Luce for The New York Times

For three years, Juan Maldonado worked in a sleek skyscraper in Midtown, reconciling stock trades at a Lehman Brothers subsidiary that managed $216 billion in assets. These days, he toils in a cramped, decidedly unglamorous office in southeastern Queens, helping the poor and the unemployed stretch budgets that often amount to a couple of hundred dollars a week.

Mr. Maldonado is the common man’s Charles Schwab, giving free financial advice to people more likely to cash their checks at Western Union than to deposit them in a bank. He might call a creditor to renegotiate the interest rates on an outstanding payment, try to dissuade a widow from selling her jewelry to pay a J. C. Penney bill or try to convince an out-of-work father of four that it still made sense to open a savings account.

“Savings is really not an amount; it’s an activity,” Mr. Maldonado told the man.

His office in Jamaica is by the second-to-the-last stop on the F subway line, past a discount furniture store, a bankruptcy law practice and a used-car lot with a neon sign that says, “No Credit, No Problem.” He arrives at work promptly at 9 a.m., his shoes shined, his shirt pressed and his tie fashioned in a Windsor knot — his uniform since his days in more luxurious surroundings. Appointments last an hour; Mr. Maldonado was booked solid for two weeks.

He is part of an ambitious effort to reduce poverty in the city, started about two years ago by Mayor Michael R. Bloomberg, who knows something about money management and sees it as a path to economic stability, even for people of modest means.

“As important as education is, when things get really complicated, that’s not enough,” said Jonathan B. Mintz, commissioner of the Department of Consumer Affairs, which runs the program. “You need to be able to sit down with a professional who is going to look at your financial problems, at your documents, and help you through the crisis, like folks in higher-income tax brackets do.”

Nearly 4,000 people have met with the financial advisers since the first office opened, in the Melrose section of the Bronx, in June 2008, before the economy imploded. The advisees’ average annual income is $17,000, and their most common problem is debt.

The recession has increased demand and has helped broaden the talent pool that the city and the nonprofit groups that help run the program can tap into. Heather Doherty, 31, left the American International Group to oversee the program at the department’s Office of Financial Empowerment.

“The underlying fundamentals are the same in this job as they were in my old job,” Ms. Doherty said. “It’s the solutions, like the financial products and services that people need, that are vastly different.”

To Mr. Maldonado, 30, who left Lehman Brothers months before the bank’s cataclysmic bankruptcy, it was a natural transition. He was raised poor in the Bronx, where his mother relied on welfare checks and food stamps.

“I learned the value of money very early on,” he said. “I also learned that saving isn’t something poor people care about much.”

Mr. Maldonado, who started with the program in May, is equal parts cheerleader, counselor and money guru. Words like “leverage,” “earning power” and “asset-building goal” spill easily out of his mouth, and they seem out of place in an office where notices about stroller recalls and free cancer screenings hang on the walls. Mr. Maldonado will not hold clients by the hand, but he will show them the way. And instead of admonishing them, he will nudge them into admitting to a financial indiscretion, as he did when he pulled Peyi Bravo’s credit report.

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A challenge is finding a compelling reason to set money aside. For Lia Aguirre, it was the prospect of a trip home to Ecuador.Credit
Kirsten Luce for The New York Times

Ms. Bravo, 29, came to New York from Peru in 2003 and settled with her mother in Flushing, Queens. She has a degree in accounting and had been looking for an entry-level job since she graduated from college in June. So she went to a city career center and applied for a job in customer service. It was there that she heard about the program.

“I came because I want to understand how my credit score works,” Ms. Bravo said.

There was a red flag on her credit report under a cellphone carrier, and Mr. Maldonado asked her if she had made a late payment. Ms. Bravo denied it. Mr. Maldonado smiled, cocked his head and asked if she might have forgotten to pay a bill.

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Clients find their way to the financial counseling service in a variety of ways, including through the city’s 311 information number, job-training programs, caseworkers and elected officials. The city has a staff of about a dozen people and raises private money for nonprofit groups to run the service and pay counselors in offices, called financial empowerment centers, in every borough except Staten Island.

The groups have the same philosophy but slightly different approaches. Mr. Maldonado’s employer, the Financial Clinic, focuses on unearthing an emotional connection that will give people who are struggling a reason to save. It could be the desire to open a small business some day, as it was for Ms. Bravo, or the hope of sending children to college, as it was for Henry Soto, 34, who has four daughters.

An accountant referred Mr. Soto to Mr. Maldonado, who set aside his debt and possible tax problems to focus on his application for disability benefits. Mr. Soto, who lives in Maspeth, Queens, has hidradenitis suppurativa, a rare skin disease that makes it painful to stand or sit for too long. He worked in construction but was laid off in the spring when his company downsized because of the economy. Since then, his family has been living on his unemployment benefits, which are due to run out in May.

“I have to find a way out, for my girls,” Mr. Soto said.

For Lia Aguirre, the reason for saving was less clear. She is 74 and has lived alone in a rental apartment in Elmhurst, Queens, since her husband died in November. She has three children, who all have lives — and problems — of their own.

“With this age, without my husband, I have no goals,” Mrs. Aguirre told Mr. Maldonado.

“What would make you happy?” he asked her. She said she would like to take a trip to her home country, Ecuador, but the ticket cost too much, $840.

“See, that’s your goal!” Mr. Maldonado exclaimed.

Mrs. Aguirre has more than $5,000 in credit card debt, and receives $835 a month in Social Security, about $150 from her husband’s life insurance and $65 from her pension as a retired garment worker, she said.

This month, she sold an 18-karat gold necklace and medallion so that she could pay part of her J. C. Penney bill. Mr. Maldonado reproached her and sent her home with homework, as he often does after a client’s first appointment, to call each of her creditors to negotiate a payment plan.

“I need to find out if they’re committed,” Mr. Maldonado said of his clients. Two-thirds of the people who show up for a first appointment at the financial centers do not return. He spends a lot of time on the phone, he said, confirming appointments, following up after a first visit, prodding those who miss a second visit to reschedule.

He spoke to Mrs. Aguirre 16 days after they met, and she told him she had signed up for a cheaper telephone plan and downgraded her cable service, and was well on her way to negotiating a lower interest rate with one of her creditors. She sounded encouraged and said she wanted to see him again.